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Foreclosure in Saratoga : Real Estate Advice

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  • Local Info4
  • Home Buying39
  • Home Selling2
  • Market Conditions7

Activity 8
Arpad Racz, Real Estate Pro in San Jose, CA
Mon Feb 9, 2015
Arpad Racz answered:
Hi Manisha,

I can put you in touch with an Architect and Builder in Los Gatos if you would like a more detailed answer.

Kind regards,

Arpad
0 votes 8 answers Share Flag
Terri Vellios, Real Estate Pro in Campbell, CA
Sun Feb 1, 2015
Terri Vellios answered:
Foreclosure homes are not the bargain they appear to be. If you are looking at Foreclosure Radar, Realty Trac or the like, these are sights designed to gather information to sell you a service or sell your information for a gain. Please keep that in mind.

There are Short Sales, Bank Owned, and Foreclosures. A real foreclosure is when the owner has defaulted on their debt and THAT debt is foreclosing. It doesn’t necessarily remove any superior liens over the subordinate lien. What that means if you go to the court house with your required cashier’s check you could be purchasing the foreclosed debt, along with the first, property taxes, contractor liens or any other combination of problems.

So I highly caution all buyers that that route is only designed for those with a lot of knowledge, resources, and are ok with the potential risk to liability, financially solid investors.

RENT TO OWN:

This is rare in a seller’s market and in a high demand rental market. Where rent to own comes into play is when a seller can not or decides not to sell at this current time and wants to get a tenant that will likely pay above market rate for rent and put up money to lock in an agreed to sale price option.

This is how that works. The Seller and Buyer will agree to an option, say in one year the Buyer has an option of turning the lease into a purchase contract. The purchase contract terms are agreed to now. The price, etc. In the contract the Buyer agrees to pay an option, usually this option can be equivalent earnest money and often is higher than a security deposit. Example $5,000. This option money will be applied to any down payment when the option is exercised. In addition the buyer and seller (landlord/tenant) agree that a portion of the rent will be applied to the future purchase price. Example, rent is $1200 but tenant will pay $1500 with $300 going towards the future purchase price. In one year if the Buyer/Tenant decides to exercise their option to purchase than the option money, in this example $5000 plus the option rent $300 x 12 = $3,600 then $8,600 would be considered down payment on the purchase. In the event the Buyer does not exercise their option the $3,600 is not returned, and what ever was agreed in the $5,000 option is either returned or not, per contract.

You will have two contracts, one is the lease the other is the purchase contract with an addendum for lease purchase option.

If home values go up this is a win for the Buyer as they have locked in a lower purchase price. It’s not great for the seller because the seller has locked up their property and can’t rent or sell during the option period. Also if prices go up they are selling at a loss.

If prices go down a buyer may not want to exercise their option to buy and then may forfeit the option money.

The other part of the answer is financing. Some lenders will finance and some may not. If you do have a seller carry back it may be at a higher rate and I highly encourage you to have the documents drawn up by a professional skilled in that type of transaction.
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Ricky Ablaza, Real Estate Pro in Milpitas, CA
Fri Apr 18, 2014
Ricky Ablaza answered:
HI Sush,

I am an REO listing agent for BofA, EMC,and Chase. I specialize in pre foreclosure properties. Call (408-316-0793) or email (rpablaza@comcast.net) so we can talk and see how I can be of service to you.

Thanks
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Daniel Shi, Real Estate Pro in Cupertino, CA
Mon Jun 25, 2012
Daniel Shi answered:
Hi Kiran,

As previous answers suggested, this is not the "Listing Price" for this property, it's the amount of deed transfer when bank took over it. Bank will list at or near market value. To help you understand more on various foreclosing phases, you may read my blog here:
http://www.trulia.com/blog/danielshi/2012/06/overview_of_foreclosing_process_explained_to_buyers

Happy searching!

Daniel Shi
dshi@sogorealty.com
1.888.785.8818 ext.100
http://SoGoRealty.com
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Grace Morioka, Real Estate Pro in San Jose, CA
Wed Jun 20, 2012
Grace Morioka answered:
Hi Kiran,

If you are interested in a specific home or would like to look at homes available in Saratoga, I can help you! Like Flavio, I offer 50 percent buyer commission rebates and in the $1 million plus range, that rebate can be as much as $15,000 or more to the buyer. Please keep in mind that some foreclosure properties do not qualify for rebates, in which case the commission rebate can go toward closing costs, but each case is different and we will need to discuss the specifics. I have successfully handled and negotiated both short sales and foreclosure purchases and would be interested in talking with you.

Sincerely,
Grace Morioka
Area Pro Realty Peoples Choice
408-426-1616
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Jayshree  De…,  in Saratoga, CA
Sat Aug 29, 2009
Jayshree Desai answered:
Alexandra, if you can make ALL cash offer then bank owned homes would be a good idea. Short sales can sometime take a long time so you need to have patience. Look at all the homes in your price range and see what you like versus going only for foreclosures since sometimes you can get a good deal on a regular sale if there is bankowned/short sale home close by :) ... more
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Michelle Car…, Real Estate Pro in Coppertino, AL
Mon Jul 20, 2009
Michelle Carr-Crowe answered:
Not the flippers of old. The ones in the market are looking to pay land value (like the one on Cox with a 10K lot for $599K), pay about $300-350K to build a luxury home, then sell for $1.2-$1.3M. It really only makes sense for seasoned pros/contractors who have the required cash flow, resources and margins to ride this wave.

That said, I know a lady contractor working heavily in Saratoga that typically buys them land value, does a very high end job and usually sells them for $1.5M - and those are the Saratoga with Campbell schools.
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